Saturday 26 July 2003 18.12 EDT
First published on Saturday 26 July 2003 18.12 EDT

The beloved Canadian author Carol Shields died on July 16 at her home in Victoria, British Columbia, after a long battle with cancer. She was 68. The enormous media coverage given to her and the sadness expressed by her many readers paid tribute to the high esteem in which she was held in her own country, but her death made the news all around the world.

Conscious as she was of the vagaries of fame and the element of chance in any fortune, she would have viewed that with a certain irony, but she would also have found it deeply pleasing. She knew about the darkness, but - both as an author and as a person - she held on to the light. "She was just a luminous person, and that would be important and persist even if she hadn't written anything," said her friend and fellow author Alice Munro.

Earlier in her writing career, some critics mistook this quality of light in her for lightness, light-mindedness, on the general principle that comedy - a form that turns on misunderstanding and confusion, but ends in reconciliation, of however tenuous a kind - is less serious than tragedy, and that the personal life is of lesser importance than the public one.

Carol Shields knew better. Human life is a mass of statistics only for statisticians: the rest of us live in a world of individuals, and most of them are not prominent. Their joys however are fully joyful, and their griefs are real. It was the extraordinariness of ordinary people that was Shields' forte, reaching its fullest expression in her novels Swann, The Republic of Love, and especially The Stone Diaries. She gave her material the full benefit of her large intelligence, her powers of observation, her humane wit, and her wide reading. Her books are delightful, in the original sense of the word: they are full of delights.

She understood the life of the obscure and the overlooked partly because she had lived it: her study of Jane Austen reveals a deep sympathy with the plight of the woman novelist toiling incognito, appreciated only by an immediate circle but longing for her due.

Born in 1935 in the United States, Shields was at the tail end of the postwar generation of North American college-educated women who were convinced by the mores of their time that their destiny was to get married and have five children. This Carol did; she remained a devoted mother and a constant wife throughout her life.

Her husband Don was a civil engineer; they moved to Canada, beginning with Toronto in the 60s, a time of poetic ferment in that city. Carol, who was already writing then and attended some readings, said of that time, "I knew no writers." Undoubtedly she felt relegated to that nebulous category, "just a housewife", like Daisy in The Stone Diaries and like Mary Swann, the eponymous poet who is murdered by her husband when her talent begins to show.

(Canadian readers would understand the allusion, but British ones who might consider this plot far-fetched will be interested to know that there was a Canadian woman poet murdered in this way: Pat Lowther, whose best-known collection is The Stone Diary.)

After obtaining an MA at the University of Ottawa, Shields taught for years at the University of Manitoba, in Winnipeg, where she began publishing in the 70s. But this was the decade of rampant feminism, in the arts at least. Her early books, including Others, Intersect, Small Ceremonies, and The Box Garden, which examined the vagaries of domestic life without torpedoing it, did not make a large stir, although some of their early readers found them both highly accomplished and hilarious. She had her first literary breakthrough - not in terms of quality of writing, but in terms of audience size - in Britain rather than in North America, with her 1992 novel The Republic of Love.

Her glory book was The Stone Diaries, which was shortlisted for the Booker Prize and won the Canadian Governor General's Award, and then, in 1995, the American Pulitzer Prize, a feat her dual citizenship made possible. Her next novel, Larry's Party, won the Orange Prize in 1998.

To say that she was not thrilled by success would be to do her an injustice. She knew what it was worth. She'd waited a long time for it. She wore her new-found prominence with graciousness and used it with largesse. One of the last instances of her enormous generosity of spirit may not be well-known: she supplied a jacket quotation for Valerie Martin's fine but challenging novel, Property - a book which went on to win the 2003 Orange Prize. It takes place in the American south during slavery, and none of the characters are "nice", but as Carol remarked in a letter she wrote me, that was the point.

Unless, her last novel, was written in the small space of time she spent in England, after beating cancer the first time and before it came back. It's a hymn to the provisional: the sense of happiness and security as temporary and fragile is stronger than ever.

Unless was published in 2002; although it was shortlisted for just about every major English-language prize, the Munro Doctrine, informally named after Alice Munro, had set in by then - after a certain number of prizes you are shot into the stratosphere, where you circulate in radiant mists, far beyond the ken of juries.

Several months before her death, Carol published - with co-editor Marjorie Anderson - Dropped Threads 2, the sequel to the spectacularly successful 2001 anthology Dropped Threads. This was a frankly feminist collection, taking "feminist" in its broadest sense: contributors were asked to write about subjects of concern to women that had been excluded from the conversation so far.

Those who had heard Carol Shields interviewed were probably surprised by this strain in her character, and by the angry letters addressed to male pundits dismissive of woman writers in Unless, because in conversation she was discreet and allusive. The little frown, the shake of the head, said it all.

Possibly feminism was something she worked into, as she published more widely and came up against more commentators who thought excellent pastry was a facile creation compared with raw meat on skewers, and who in any case could not recognise the thread of blood in her work, though it was always there. The problem of the luminous is that their very luminosity obscures the shadows it depends on for its brilliance.

I last saw Carol Shields at the end of April. Her new house was spacious, filled with light; outside the windows the tulips in her much-loved garden were in bloom. Typically for her, she claimed she couldn't quite believe she deserved to live in such a big and beautiful house. She felt so lucky, she said.

Although she was very ill, she didn't seem it. She was as alert, as interested in books of all kinds, and as curious as ever. She'd recently been reading non-fiction works on biology, she told me: something new for her, a new source of amazement and wonder. We did not speak of her illness. She preferred to be treated as a person who was living, not one who was dying.

And live she did, and live she does; for as John Keats remarked, every writer has two souls, an earthly one and one that lives on in the world of writing as a voice in the writing itself. It's this voice, astute, compassionate, observant, and deeply human, that will continue to speak to her readers everywhere.

· Margaret Atwood's most recent novel is Oryx and Crake, published by Bloomsbury (£16.99).